Treasury cuts CBK overdraft by 36pc

The Treasury has cut its emergency borrowing from the Central Bank of Kenya (CBK) by 36 per cent in the past week just as it collected billions from T-bill auctions.

The CBK in the latest bulletin said the Treasury’s outstanding borrowing stood at Sh29.93 billion compared to Sh47 billion in the previous week.

The stock of the overdraft had been rising from August last year, hitting Sh44 billion in November – which was around the General Election and repeat presidential election.

The government’s borrowing was falling just as it was rejecting expensive bids from investors in the first infrastructure bond of this year. Bids amounting to Sh55.7 billion were put in, indicating the liquidity held by financial institutions.

In a separate report, Kestrel Capital showed increase in liquidity was a result of several maturities of both treasury bills and bonds.

The investment bank says Sh20.15 billion was released into the financial markets on January 22. It further shows that since the beginning of this month, over Sh12 billion has been redeemed in 91-day T-bills, over Sh25 billion in 182-day T-bills and over Sh8 billion released in 364-day T-bills.